Amazon's attempt to muscle in on IBM's territory and grab a slice of oh-so-lucrative government cloud workloads took a step forward on Monday after a Federal Judge ruled in favor of Bezos & Co.
The ruling by Judge Thomas Wheeler was published on Pacer on Monday, and could torpedo IBM's attempt to knock the Amazon Web Services …

Yes, but do you always want the cheapest? Sometimes the best bid is not the cheapest, its the best at performing the required outcome. Cost isn't always the driving factor, and when it comes to this project, i highly doubt its much of a factor at all! Amazon are without a doubt the market leaders in the cloud market, that isn't by chance, they offer more features and a more seamless solution.

Since when is IBM associated with the word "cheapest"? And without a doubt is IBM the market leader on supplying enterprise IT to the big governments and fortune 500 companies. I suspect that in the case here it is more of an "apple to oranges" comparison, since we do not know the details of the bids that where placed.

So IBM will now have to pay for...

1. Mindlessly slashing costs in the mistaken belief that customers ONLY care about price. Amazon won on a HIGHER priced because their solution was judged to be better.

2. The mistaken belief that 'technical' work should be totally outsourced to far away places with no focus on driving their brightest onto interesting things that push technology forward (no, those interesting 'R&D' roles are reserved for phd types who are busy banging out patents). Once Amazon was done using its smart engineers to build a book store it put them to work to innovate cloud hosting and they've done a remarkable job. IBM could never match this, they resource people in the belief that technical resources are just like cheap manual labour - undifferentiated and easily replaceable.

Unfortunately, in places like IBM where the bean counters are entrenched - they're often the last ones to go after all the useful people have been fired / rebalanced / off-shored.

Using the excuse

"IBM has for decades supplied the government with proven mission-critical operations. The company remains committed to provide secure, reliable and robust cloud solutions to federal agencies"

or they could have said

IBM has for decades supplied the government with seats on it's board for people who backed our bids. The company remains committed to provide secure, reliable and robust board positions to federal agencies heads when they retire

Ironic twist

It's funny to see IBM having had the *lower* bid, by a substantial margin: one word that has never been associated with IBM is "cheap". For Amazon to be 50% more expensive yet better overall, there must have been something quite strange going on: were IBM only doing half the job, or had Amazon got some wonderful extra to offer that was worth a huge extra fee?

I could imagine the positions reversed: Amazon beat IBM's price by a third, IBM get upset and challenge. For Amazon to win with a much higher price, though? Maybe IBM's last bribe^Wcampaign contribution check bounced, or went to the wrong side, or maybe Amazon had something really clever on their side. Or IBM's had big vendor lock-in risks? Getting shackled to a proprietary hardware+software platform might be worse than the initial 33% saving, after all.